Free trade is fuel for thought as officials return to Cambodia from summit
Prime Minister Hun Sen attends the plenary session of the 16th Association of Southeast Asian Nations (ASEAN) summit in Hanoi, Vietnam, on Thursday. AFP
ASEAN nations will push harder for internal commerce and trade to boost the economies of the bloc’s 10 members, Commerce Minister Cham Prasidh said Friday, as he arrived in Phnom Penh from a regional summit in Hanoi.
Speaking to reporters at Phnom Penh International Airport, the minister said ASEAN countries had achieved three quarters of all agreements necessary to allow free trade among its members.
Cambodia has implemented 83 percent of requirements, but still needs to approve ASEAN memoranda and agreements through the National Assembly and Senate in order to fully join the “ASEAN economic community”, he said.
“For Cambodia, we must approve any laws that we owe ASEAN,” he said. “What we have left to do, we must fulfill.”
By 2015, all goods from all ASEAN countries are expected to trade without tariffs to form a single market. So far, six ASEAN members have abolished nearly all inter-regional trade tariffs, he said.
Cambodia, Laos, Myanmar and Vietnam have managed to cut levies on 98.46 percent of goods, he added.
Although political challenges facing the region threatened to overshadow deliberations in Hanoi last week, ASEAN leaders finalised new agreements and helped solidify their economic ties.
In a joint statement released Thursday, ASEAN finance ministers said they expected growth of between 4.9 and 5.6 percent in 2010, after the region grew 1.5 percent last year.
With countries emerging swiftly from the economic downturn, the ministers called for coordinated action in monitoring their economies and winding down stimulus measures.
“We will continue to pursue supportive policies until recovery is secured, but at the same time, we will carefully withdraw our fiscal, monetary and financial sector support once private demand becomes self-sustained,” the statement read.
An agreement to slash tariffs within the region – the ASEAN Trade in Goods Agreement – will be enforced starting next month, Cham Prasidh said Friday, echoing statements of economic officials in Hanoi.
The agreement was originally set to go into force in January of this year as part of the newly established ASEAN Free Trade Area, but was delayed pending the resolution of a tariff disagreement between Thailand and the Philippines.
By August, the bloc will implement an agreement granting protections and preferential treatment to foreign investments made within the region by ASEAN members.
ASEAN Secretary-General Surin Pitsuwan noted that in a region of 580 million people with a combined GDP of US$2.7 trillion, intra-regional foreign direct investment stands at just 20 percent.
An increase in such investment, he said, will hopefully help expedite the bloc’s efforts to “bridge the gap” between its wealthier members and developing countries such as Cambodia.
The finance ministers’ statement also lauded last month’s establishment of the Chiang Mai Initiative, a $120 billion currency swap pool between ASEAN countries and China, Japan and South Korea that will help manage regional short-term liquidity problems on the model of the International Monetary Fund.
The launch of the $700 million Credit Guarantee Investment Facility (CGIF), the ministers added, should help boost the liquidity of local currencies, as it will back corporate bonds issued in such currencies by regional companies.